Tag Archives: TANF

We have a presidential candidate who gets up at odd hours of the night to tweet insults to former beauty pageant winners, and who expended a great deal of time and energy bemoaning the categorization of his White Supremacist followers as “deplorable.” If these are one’s priorities so be it, but there’s a difference between nightmares and issues – a differentiation not tackled all that efficiently by his supporters and surrogates.

Republicans appear to be beset with nightmares, not the least of which is we, as a nation, might seem weak in the eyes of others. Strength is Action. Action is Strength. We must, like a Hollywood B-Movie production complete with car chases and explosions, appear strong. As we do when bombing some location into gravel and small piles of rubble. This is the nightmare of the small man in the bar just before closing time, well liquored up, who decides to demonstrate his masculinity by punching some fellow who has offer some vague (and probably misinterpreted) insult. Should these people wake up and read the information available they’d find that the United States spent some 54% of its discretionary spending on the military.

And, how does this compare to military spending by other nations? The U.S. spends approximately $2.77 for every dollar spent by the Chinese.

So, this ought to give some comfort to those whose sleep is disturbed by dreams of military annihilation at the hands of the nefarious. We have the best equipped, best lead, most professional military in the world. There are issues here – not nightmares.

One issue is the tendency toward militarism, the notion that all problems have a military solution and thus the military must be accorded a prime place in national planning and policy. This topic was explored here about eight years ago:

“Evidently lost on the militarists is the notion that one can be supportive of the military without adopting militarism. In fact, a “muscular” militarism that posits the application of military force to each and every conflict is counter-productive to long term military interests. The ‘whack-a-mole’ Bush Administration/McCain policies have the U.S. Armed Forces stretched to the limit, with used and abused equipment, and over-deployed troops, who are facing serious obstacles to receiving comprehensive care and benefits after their service. A cogent, less militaristic, policy would recommend the continual evaluation of our deployment ramifications, sentient assessments of our capacities, and a rational review of our own recruiting and remuneration standards. A less militaristic policy would allow us to employ the diplomatic tools in our arsenal to spare the unnecessary exploitation of our military. When we ‘wise up’ we’ll realize which Party’s candidates can deliver these policies.” [DB]

In short, if we’ll stop all the posturing and flag waving pseudo-patriotism and start thinking about how and when the use of military force is applicable without draining our resources and putting our diplomatic efforts in jeopardy, then we can all sleep a bit better.

The second nightmare which seems to be grabbing hold of the sweat soaked sheets of our Republican friends is that someone, somewhere, is cheating us out of what is rightfully ours. Taxation! Tax money being spent on Welfare Queens and Food Stamp cheats! Oh, the misery. Waking up and using The Google will solve one part of the nightmare – we really aren’t “taxed to death.”

“The tax burden is lower in the U.S. than in many other developed nations. Of 34 OECD countries, the U.S. tax rate for the average single American with no children ranks No. 17. The tax burden on a single person with two kids ranks 27th. Comparing tax rates across countries is difficult, however, without taking into account how much people benefit from their tax payments in college tuition, retirement income, or more intangible rewards, such as security and the social safety net.” [BlmbNews]

The reality is that there is no monster under the bed. We aren’t even in the top ten OECD countries in terms of taxation. But, but, but, how about welfare cheats? If we look at the SNAP program from the USDA we find that: “The SNAP national payment error rate for fiscal year 2014 is 3.66 percent. This indicates a 96.34 percent accuracy rate of providing benefits to low income people. In fiscal year 2014, over 99 percent of participating households were eligible for SNAP as determined by income and other program criteria.” [USDA] I can’t speak for anyone else, but if I could get my total financial records into the 96.34% accuracy category I’d be one happy camper in sweet dream land.

However, nightmares aren’t made of rational ruminations about fiscal accuracy and accounting practices. They come from anecdotal renditions and repetitions of ‘stories’ about seeing some guy drive up in a new pickup and toting out a case of Budweiser.

“The Act precludes the following items from being purchased with SNAP benefits: alcoholic beverages, tobacco products, hot food and any food sold for on-premises consumption. Nonfood items such as pet foods, soaps, paper products, medicines and vitamins, household supplies, grooming items, and cosmetics, also are ineligible for purchase with SNAP benefits.” [USDA]

Under the terms of the 2002 legislation, no “illegal immigrants” are eligible for SNAP assistance. [USDA] Further, ‘non-qualified aliens’ are not eligible for a host of other benefit programs, as specified in bureau or agency rules:

“Federal public benefits include a variety of safety-net services paid for by federal funds. But the welfare law’s definition does not specify which particular programs are covered by the term, leaving that clarification to each federal benefit–granting agency. In 1998, the U.S. Department of Health and Human Services (HHS) published a notice clarifying which of its programs fall under the definition. The list of 31 HHS programs includes Medicaid, the Children’s Health Insurance Program (CHIP), Medicare, TANF, Foster Care, Adoption Assistance, the Child Care and Development Fund, and the Low-Income Home Energy Assistance Program.” [NILC]

Sleep well Republican friends, the undocumented are not eligible for support, and we are being most parsimonious in regard to our bestowal of benefits.

Democrats might sleep more comfortably if the following situation were improved:

“Despite growth in SNAP caseloads since the onset of the Great Recession, about 17 percent of those eligible go unserved and SNAP is missing nearly six in ten eligible elderly persons. SNAP policies that improve program access and increase staff capacity to process applications as well as SNAP outreach can help communities, families and businesses maximize federal dollars.” [FRAC]

We should not forget the other monster in the closet. Others. If slavery was America’s Original Sin, and segregation its phalanx of myrmidons, then racism is the residual. However, demonization is not necessarily the exclusive domain of people of color – we’ve demonized Irish and Eastern European immigrants, Asian and Chinese immigrants, Jews, Catholics; and lest we forget “commies” during the McCarthy Era.

Perhaps some right wing individual tosses and turns on the mattress because the phone answering service wants to know if he’d like the message options in Spanish? This is America, Speak English! The immigrants will, like most others before them, and the native language will be lost in three generations:

“The authors found that although the generational life expectancy of Spanish is greater among Mexicans in Southern California than other groups, its demise is all but assured by the third generation. Third-generation immigrants are American-born with American-born parents but with three or four foreign-born grandparents.In the second generation, fluency in Spanish was greater for Mexican immigrants than for other Latin American groups, and substantially greater than the proportions of Asian immigrants who could speak their mother tongue very well. In the third generation, only 17 percent of Mexican immigrants still speak fluent Spanish, and in the fourth generation, just 5 percent. The corresponding fourth-generation figure for white European immigrants is 1 percent.What is endangered, said the authors, is not the dominance of English but the survival of the non-English languages immigrants bring with them to the United States.” [Princeton Edu/Massey 2006]

If we’re looking for some reason to lose sleep it might be because by the 4th generation we’ve lost 95% to 99% of the language facility we might have had in this increasingly shrinking world.

But, wouldn’t we all sleep more peacefully if we’d just SAY we need to fight “radical Islam?”

First, there’s a little problem defining “radical.” Do we mean what might be considered conservative Islam, men with beards, women in burkas? This leaves us with a problem – what to do with the Muslim family who wants the daughter to go to medical school because there’s a need for women doctors to treat women patients? What to do with the millions of practitioners of Islam who are not conservative? And the millions more who have a special word for the ISIS thugs who flout their disregard for the basic tenets of Islam – daesh. (That stuff you scrape off the bottom of your shoes.)

Sleep well, the odds against an American being killed in a terrorist attack are 1: 25,000,000. [TechJuc] Another comforting (?) thought is that an American is far more likely to be shot by a toddler than a terrorist. [Snopes]

But that is another nightmare we don’t like to talk about. I’d sleep better if we could do something about keeping firearms out of the hands of toddlers…

When the Department of Health and Human Services ran the numbers for TANF recipients in a comprehensive FY 2010 study it reported 10,269 “active case” families in Nevada. [DHHS pdf] 20% of those were single individuals, 35.4% were two member households, 23.7% were in three member households, 12.6% were in four member households, another 5.2% were in five member households, and 3.2% were in six member households. Thus, 59.1% of Nevada’s active TANF cases involved homes with two or three members. Thus much for the right wing delusion that people on “welfare” lie about just “making babies” for the lack of anything better to do. The “average” household size for TANF recipients in Nevada is about 2.6 persons.

Who is receiving TANF benefits? In Nevada about 41.5% of the active cases did not involve an adult. 48.4% involved one adult, and 10% included benefits for two or more adults in the household.

Looking at the numbers for TANF recipients and the percentage distribution of TANF families by the number of recipient children we find that 45.5% included one child, 28.5% two children, 14.4% three children, 6.4% four children, 3.5% five children. (Table 4)

The same trend is visible if we look at TANF recipient families in Nevada in which there was no adult eligible for assistance, 43.9% of the cases included one child, 29.2% two children, 15.4% three children, 7.3% four children in the household, and 4.1% with five or more children in the family. (Table 5)

The picture emerging from the Nevada numbers is further illustrated in subsequent tables for TANF recipients in households with one adult (Table 6) and with more than one adult (Table 7) — most cases involve individuals with one child, and the households receiving TANF support declines thereafter.

Those attempting to imply that TANF beneficiaries are “those people in the inner city…” (a well known Dog Whistle) won’t find much support in the Nevada numbers either.

Of the active cases in FY 2010 35.6% were of Hispanic heritage (of any race), 31.8% were White, and 27.1% were African American. 2.1% were Native American, 1.8% were Asian, and 1.6% were Other. (Table 8) To put it another way, 67.4% of Nevada’s active TANF cases were NOT African American households. If we look at the adult TANF recipients the numbers are essentially the same — 23.7% are of Hispanic descent, 42.1% are White, 26.8% are African American, 2.6% are Native American, and 2.8% are Asian. In short, 65.8% of the adult recipients are NOT African American. [Table 21]

There are 19,518 children eligible for TANF benefits in Nevada, and 42% are of Hispanic descent, 26.3% are White, 26% are African American, and 1.7% are Native American. [Table 35] Again, the face of welfare in Nevada certainly isn’t predominantly black. Sadly, these are the figures which cause some to complain that the 14th Amendment to the U.S. Constitution should be repealed or replaced with a more stringent test for U.S. citizenship. However, this argument can’t be buttressed from these numbers alone because the underlying assumption that the parents of the child are necessarily “illegal” can’t be determined from the overall statistics. Further, the ramifications of repeal or replacement of the 14th Amendment is a societal and legal discussion which deserves its own forum. And, for emphasis on this point — of the 19,518 children included in active TANF cases in Nevada 98.3% are U.S. citizens, and 1.7% are “qualified aliens.” [Table 40]

And then there’s the Teenaged Mother nonsense — also not in evidence if we look at the numbers from Nevada. There were 3,875 adolescent recipients of TANF benefits of whom 82.9% were NOT parents, meaning the Teen parents comprised 17.1% of Nevada’s TANF recipients. [Table 10]

What do we know so far? We know that large families aren’t “on” TANF, and we know that for the most part these families aren’t African American, they aren’t “illegals,” and we know that most of them aren’t the stereotypical adolescent parents.

Why might older adults in the households receiving TANF benefits not be recipients themselves? 64.8% of the “assistance units” (think of a household) had no adults included in the Nevada TANF program. 24% of these were ineligible because they were receiving SSI benefits, and another 75.4% because they could not prove citizenship. [Table 12] There goes that whopper again — non-citizens signing up for “welfare.” Nevada’s rules are simplicity itself: “All persons applying for or receiving TANF must provide satisfactory evidence of citizenship or qualified non-citizenship status.” Taking a look at the issue from another direction, of the 7,034 adult recipients of TANF benefits 91.7% are U.S. citizens and 8.3% are “qualified aliens.” [Table 26] “They” are obviously NOT “coming here to get on welfare.”

One of the more depressing numbers shows up in Table 30, in which we find that of the active case adults (7,034) approximately 41.1% are working. This says perhaps too much about the level of wages and the kinds of jobs available for TANF households that a person could be holding down a job and still be below the poverty line in terms of TANF eligibility. We’d expect the 52.4% of the unemployed and the 6.5% of the discouraged workers to be earning less than sub-poverty wages, but not necessarily that 41.1%.

49.8% of the male TANF recipients and 38.9% of the women are employed, and still not earning enough to break over the poverty line. [Table 30]

And, down goes another bit of right wing mythology about families receiving public assistance in Nevada.

Imagine our right wing friend sputtering, “but but but…they don’t work!” Not. So. Fast. In bureaucrat-ese the important element is the PRP, or in English — a personal responsibility plan. Here is the Federal summary of what’s required in a Personal Responsibility Plan:

“The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established a framework for creating a time-limited, work-based assistance system that emphasizes a “work first” approach. It requires states to meet federally mandated work participation rates by engaging recipients in federally defined activities. All recipients with a work requirement must participate in one or more of nine “core” activities, of which vocational education is one, for 20 hours per week. Recipients with a child age six or older are required to participate for 30 hours per week and two-parent families are required to participate for 35 hours if they don’t receive federally-funded child care assistance and for 55 hours if they do. For any hours required over 20, recipients can participate in core activities for more hours or in three additional non-core activities, two of which may encompass vocational education — job skills training directly related to employment, and education directly related to employment (for recipients who have not completed high school or the equivalent).” [DHHS] (emphasis added)

In other words, in order to qualify for TANF assistance the individual must be working, seeking work, in a job training program, or in school.

Now, what do we know? No, there aren’t any Big Families involved in our major public assistance program, and they aren’t predominantly African American, and they aren’t that stereotypical teen mother, and they aren’t non-citizens or undocumented workers, AND they aren’t allowed to “sit on the stoop drinking beer and listening to boom boxes.”

But wait, how about all those “other benefits” which are commonly tacked on in an attempt to demonstrate that Welfare Queens (not the corporate or ranching variety) are leaching us dry?

Of the 10,269 active TANF cases in Nevada as of FY 2010, some 99.3% were eligible for medical/health care services. Assistance slides rapidly down hill thereafter. 73.7% were eligible for SNAP (food stamp) benefits, receiving an average of $425.04. Zero (0%) were receiving public housing, and only 14% were receiving any form of rent subsidy. 7.9% were receiving some form of federally subsidized child care, and another o.6% received state or locally subsidized child care assistance. [Table 13]

The adults are not, as a rule receiving any disability benefits, because of the 7,034 recipients in the report 99.6% received no disability benefits. [Table 23] Those ‘reports’ which lump all the possible benefits together and purport to demonstrate that Welfare is a Great Drain, aren’t drilling down to the actualities of TANF benefits and their distribution.

About 4.8% of TANF households in Nevada have some ‘outside’ resources, but as Table 14 demonstrates, not much. The average child support contribution is $211.04 per month, and for the 22.3% who have cash resources the average is about $202.76. We can’t add these together because not all households receiving child support payments are those in which there are other cash resources, and vice versa.

The report does tell us that adults receiving TANF benefits are young, but not necessarily very young. 9.4% are under 20, 50.5% are between 20-29, another 25.3% range from 30 to 40, and 12.5% are between 40 and 49. Only 2.3% are over 50 years of age. [Table 18]

The pattern holds by gender as well. 1,369 men were TANF beneficiaries, and most were between the ages of 20-49. Only 27.9% were older than 40 years of age. [Table 19] 5,639 recipients were women, of whom only 10.8% were under 20. 53.7% were between the age of 20 and 29, 23.9% were between 30 and 39, and 11.6% were over 39. [Table 20]

One part of the common perspective is established in the Nevada figures, adult recipients are predominantly single. 63.9% are single, 23.6% are married, and 6.8% are separated. Another 5.4% were divorced, and 0.3% widowed. [Table 22]

We should also refrain from making generalizations about the levels of education achieved by TANF recipients. Of the 7,034 adult beneficiaries 1.7% have no formal education, 37.6% have some education between grades 1 and 11; 54.1% have completed grade 12, and 6.6% have some education beyond high school. [Table 25]

There another myth that need challenging — that those who accept public assistance are dooming their souls to a life time of subservience to the government and destroying their work ethic. Again, the real numbers don’t square with the mythology. The TANF families in active cases including children receive assistance for an average of 17.9 months in Nevada. The state of South Dakota has the highest average in the report, some 50 months. [Table 41]

Even if we consider the stereotypical (and highly inaccurate) face of welfare as the African American teen mother then her 75.3 years of life expectancy would mean that in Nevada she would spend only 17.9 months of her expected 900 months of life on this planet receiving TANF benefits, or about 1.9% of her life span.

If we look at the tables for children receiving TANF assistance in Nevada the picture remains similar. There are 4,266 children receiving benefits (in homes where the adults are not). The number of months for which benefits are paid averages out to 28.1. [Table 42] Hardly a life time of dependency. Can we argue that the child who received benefits might at some point in his or her life also require assistance as an adult? One could, but that would require assuming that children once beneficiaries of assistance will necessarily require assistance as an adult. Even if we accept this questionable proposition, the numbers dictate that the assistance will not be a life time dependency but a short term benefit of 17 to 18 months on average.

As we examine the active TANF cases for Nevada in FY 2010 there are several issues that should be resolved by the figures. Welfare in Nevada is NOT Black, it is not necessarily a teen mother, it is not undocumented workers, it is not a life time subservience, it is not lucrative, and it is not draining the Yankee Work Ethic (whatever that might be) from the souls of the recipients.

Only in the highly generalized, ideological, world of right wing propaganda does the mythology drive the perception of welfare as a trap net. The real numbers tell a very different story, in which we do provide a safety net for our citizens, and by extension our economy.

Things we should probably fix — the fact that Nevada is one of 20 states in the union which allow private interest lobbyists to participate in the state pension system. [RGJ] The fact that Nevada ranks last in per capita spending on welfare and human services.

On one hand we’re subsidizing the retirement of some individuals who have spent long hours in the Legislative Building arguing against spending “precious taxpayer dollars” on services to taxpayers — as in every Nevada resident who pays sales taxes, and on the other we have members of our communities who are struggling financially, and who are definitely not feeling “entitled” as described by the most recent faulty pseudo-study of welfare spending in America from the folks at the Cato HQ. [Moyers]

Talking about what constitutes welfare all too often provides an object lesson in how apples, oranges, nectarines, grapefruit, and bananas can be combined and compared. Taken to the ultra-right extreme, “welfare” incorporates educational benefits to veterans, Social Security, Medicare, Medicaid, public schools, public libraries, public parks and recreation, medical services, in short anything not spent on the military, the promotion of private business, and the judiciary and police. The consequences of this distorted political philosophy are visible in our under-investment in infrastructure and the disconnect between the elitist entitlement of the 1% and the reality of the 99%. [Burnett]

So, Nevada spends $855.13 per capita on social welfare services, compared to $1021.89 in Georgia, and $1190.11 in Texas. No doubt there are those who find this a cheerful note. We spend $55,228,000 on income assistance, $1,654,577,000 on payments to vendors, and “other assistance” amounts to $636,316,000 from state and local sources. [Census, xl download] One particularly parsimonious perspective delights in these statistics, pointing out that if Nevada payments are low then potential welfare recipients won’t come to the Silver State. The fact that this keeps those receiving income assistance who are already living here in dire straits is, evidently, of little consequence.

The other distortion of income and living assistance expenditures comes when right wing think tanks like the Heritage Foundation or the Cato Institute remind us that “welfare is better than working.” There’s nothing really new here, the same type of report came out in 1995 — with essentially the same errors. CBPP summarizes:

“The claim behind these critiques is clear: federal spending on entitlements and other mandatory programs through which individuals receive benefits is promoting laziness, creating a dependent class of Americans who are losing the desire to work and would rather collect government benefits than find a job.”

The basis for the right wing analysis assumes that every welfare recipient receives every form of assistance available — even those to which they are not eligible.

“Federal budget and Census data show that, in 2010, 91 percent of the benefit dollars from entitlement and other mandatory programs went to the elderly (people 65 and over), the seriously disabled, and members of working households. People who are neither elderly nor disabled — and do not live in a working household — received only 9 percent of the benefits.”

In short, most support programs are provided to individuals who are either not in the workforce (elderly/disabled) or to people who are in the workforce but are not earning a living wage. Thus much for the “too smart to work” argument advanced by the right. That “typical welfare family” cited in the recent Cato publication is anything but typical. One of the best breakdowns of Cato’s flawed analysis of TANF and Medicaid assistance comes from Scientopia.Org:

“Nationwide, in Fiscal Year 2010, there were a total of 1,847,155 households with active TANF cases. In the same fiscal year, 18,618,436 households received SNAP (food stamp) benefits, and another 65,989,147 individuals (~25,577,188 households based on the census 2.58 individuals/household) received medicaid benefits. According to the Cato report’s own definitions, households on both of those programs should be “welfare families.” With less than 10% of SNAP households also receiving TANF, and less than 3% of Medicaid households receiving SNAP, it’s easy to see that Cato’s “typical welfare family” is actually based on an extreme case, not on anything that any of us would consider to be an “average.” [Scientopia.Org]*

If the same scrutiny is applied to housing assistance, the results are the same — a really “typical” family is worse off financially on public assistance than when at least one member is earning the minimum wage. Not in Nevada, not in California, not in Washington, D.C. Not anywhere in this country. Unfortunately, no recitation of statistics from the Reality Sphere will offset the conservative narrative which clings to their imaginary welfare queens and stoop sitting guzzlers who exist solely to reinforce the notion that the rich should be able to retain all their riches –and accumulate ever more, that markets are self correcting — 2008 anyone (?), and “government is the problem.”

So, if not the poor, who does feel entitled? Not surprisingly, it’s the top 1% of American income earners. There’s a study on this too:

Paul Piff of the University of California at Berkeley told PsyPost “there is something about wealth that gives rise to a sense of entitlement, a sense that one deserves more good things in life than others, which in turn gives rise to an increased or inflated sense of self-importance, vanity, grandiosity, and omnipotence (narcissism).”

Not to put too fine a point to it, but the more one has the more one feels he or she is entitled to have. Tom Wolfe summed up the type in The Bon Fire of the Vanities:

“He lived on Park Avenue, the street of dreams! He worked on Wall Street, fifty floors up, for the legendary Pierce & Pierce, overlooking the world! He was at the wheel of a $48,000 roadster with one of the most beautiful women in New York—no Comp. Lit. scholar, perhaps, but gorgeous—beside him! A frisky young animal! He was of that breed whose natural destiny it was…to have what they wanted!”

It is all well and good to aspire to having what one wants, it becomes problematic when those with a well developed sense of entitlement pursue politics which yield fewer and fewer prospects and opportunities for the remainder of the population. Yet more dispiriting for our society and its political institutions when they issue “reports” purporting to substantiate the fantasies they harbor about the entitlement of others to secure basic needs — food, shelter, and medical care.

*There are several informative rejoinders to the Heritage/Cato narrative on the relative merits of public assistance and working wages. See Dunford at Scientopia, Moyers and Company on the Think Tank Report, Brad DeLong on Josh Barro’s analysis. Slate analysis of the MacDougal WSJ misleading OP-Ed. CBPP “Cato’s fundamentally flawed analysis.”

“GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country’s standard of living. Critics of using GDP as an economic measure say the statistic does not take into account the underground economy – transactions that, for whatever reason, are not reported to the government. Others say that GDP is not intended to gauge material well-being, but serves as a measure of a nation’s productivity, which is unrelated.”

In short, we can critique the use of the GDP as a measure of our economic well being for not including bartered transactions, or private sales in which sales taxes aren’t applied, or we can note that the notions of productivity and economic health aren’t necessarily related. However, what we can’t do is dismiss the utility of the formula, nor can we argue it isn’t one of the most commonly used (and understood) metrics applied as an economic description.

So, why is this formula plastered on this blog for the umpteenth time? Because when Uncle Fester brashly opines that “We’ve got to cut government spending and get the economy back on track,” he’s offering up a classic demonstration of his ignorance about how we measure our economic situation.

Consumers buy things. That’s the C in the formula. Companies and corporations buy things. That’s the I in the formula. Governments buy things. That’s the G in the formula. We sell things to other countries, and we buy things from other countries. Those are the X and the M in the formula. The greater the DEMAND for goods and services (aggregate demand in some explanations) the more wealth is generated.

Now let’s bring this down to Uncle Fester’s level by considering the life of the lowly paper clip. Consumers buy paper clips, which are mostly used to hold sheets of paper together, or may find themselves altered to perform other tasks like being poked in the little hole in the electronic gadget to “reset” the thing, or to hang Christmas ornaments, or whatever a person might think to do with a piece of bent wire. Businesses buy paper clips. And, yes, various levels of government purchase paper clips. In fact, there are about 11 billion paper clips sold in the U.S. every year. [WSJ]

Now, imagine the impact of taking one part of the formula out of the whole. What if government cut backs caused agencies to scale back on the purchase of office supplies? This is the point at which the artificial demarcation between enterprise and government breaks down. If the government manufactured it’s own paper clips there would be no need to put the G in the formula, but it doesn’t. The federal government, like the consumers and the companies, gets its paper clips from one of two domestic producers of bent wire clips. [WSJ]

Here comes the obvious. When the government scales back purchase orders for office supplies (like our lowly paper clip) that represents a decline in demand. And, guess what! The formula for Aggregate Demand is exactly like the formula for the GDP. [Investopedia]

“The total amount of goods and services demanded in the economy at a given overall price level and in a given time period. It is represented by the aggregate-demand curve, which describes the relationship between price levels and the quantity of output that firms are willing to provide. Normally there is a negative relationship between aggregate demand and the price level. Also known as “total spending”. [Investopedia]

To see an example of the classic aggregate demand (AD) curve click here. The FRED graph for our GDP to date looks like this:

The gray area shown on the chart is the recent Recession. The blue line graphs the trajectory of our GDP to date, and the thinner red line is more technical. It’s the “Nominal potential gross domestic product,” [CBO 2001 pdf] which assumes that the line would show what happens if everyone who wanted a job had one, and all resources were being used efficiently. [See also: KCFED, pdf] Frankly, this one is a bit technical for Uncle Fester, so let’s keep it simple.

If the demand for paper clips is reduced, when consumers, businesses, and governments stop purchasing, the micro-graph for the subcategory of office supplies and the sub-classification of paper clips, would mirror the overall aggregate demand. And, the bottom line? That which reduces the aggregate demand also reduces the GDP.

This simple, but basic, proposition from classical economics is precisely why austerity measures never produce prosperity — which we measure by using the gross domestic product.

If we can hold Uncle Fester’s attention this long, perhaps we can introduce Okun’s Law. Okun’s Law observes that for every 1% decline in unemployment there’s a 3% increase in the GDP. There are some issues with the “law” the first of which is that it’s not really a law, but an observable component of the United States’ economy; and, it’s a bit funky when we add in some other variables like productivity. That said, for all its imperfections, when we reduce unemployment in the United States the GDP moves up. This isn’t just common sense — it’s an observable and quantifiable fact.

Now we get to the meaty part. If Uncle Fester is adamant about reducing federal spending because it’s a drag on the U.S. economy, then we can respond by saying if we lose 700,000 jobs as a result of the sequestration austerity measures, then according to Okun’s Law we will see a reduction in the U.S. gross national product.

A reduction in federal purchasing means a reduction in demand for goods and services. Each decrease in demand means layoffs or reduction in production or offering of services and in turn means a reduction in the gross national product. This is probably the point at which Uncle Fester will want to change the subject to something like “wasteful government spending.”

This recitation doesn’t assume that all government spending is productive. The Pentagon has already said it doesn’t want some items Congress is enthusiastic about procuring.

“In February, the Pentagon released a budget that began the process to cut at least $487 billion in defense spending over the next 10 years. This included terminating the Global Hawk, which the military estimated would save $2.5 billion over five years; the C-27J, at a savings of $400 million; M1 Abrams updates, saving hundreds of millions of dollars; and cutting roughly 5,000 positions from the Air National Guard and reducing that agency’s budget about $300 million.” [Military.com]

Since the cutbacks in these examples would come from Ohio, it’s predictable that Ohio representatives in Congress would revert to Okun’s Law and decry the loss of jobs in their districts.

“The budget is expected to be finalized after the November election, though the struggle over continued funding could extend long beyond that. Grant Neeley, professor of political science at University of Dayton, called this a “collective action problem.”

“(Legislators) need to cut the budget but (won’t) take those jobs in our state. Especially in an election year in a battleground state,” he said. “They’re going to provide rationale, but at the end of the day, it’s about protecting jobs in their district. If they have the choice between making a cut in their district and making a cut somewhere else, which one do you think they’re going to choose?” [Military.com]

What we can’t do is proclaim austerity begets prosperity calling for wider and deeper cuts in government spending — which turns the aggregate demand, the GDP measurements, and Okun’s Law upside down — while at the same time demanding that jobs not be cut from corporations and businesses within Congressional districts because of what will happen to aggregate demand and the local GDP and assuming Okun’s Law is still applicable.

Let’s guess that this is the point at which Uncle Fester pontificates that 25% of our federal budget goes to foreign aid. In the fact based universe this isn’t the case: “Since the 1970s, aid spending has hovered around 1 percent of the federal budget. International assistance programs were close to 5 percent of the budget under Lyndon B. Johnson during the war in Vietnam, but have dropped since.” [WaPo] OK, it’s not foreign aid, then it has to be “welfare.”

The total spending for Temporary Assistance to Needy Families program uses up a grand total of o.7% of our entire federal budget. [Klein] “But, but, but,” squeals Uncle Fester, “There are more Takers than Makers…” whatever that means. What it doesn’t mean is that there is an upward trend in the number of people participating in the TANF program.

Nor does it mean there’s an upward trend in Food Stamp program participation and costs. (SNAP)

In our factually based universe, all federal programs for those in poverty comprise about 7% of the total federal budget. [MJ] Yes, this is where Uncle Fester breaks in with the anecdote that he saw someone at the Food Bank who was driving a newer pickup than his.

However, all the mis-information, mis-conceptions, and anecdotal observations don’t repeal the basic rules of capitalism, and its basic understanding of Supply and Demand. Nor, do they discredit the veracity of Okun’s Law.

We do need to reduce unnecessary spending, and we do need to increase revenue by closing loopholes which only serve to place more of the taxation burden on the middle class for the benefit of the top 0.1%. What we do not need to do is torture the rules of American capitalism into a contortion which renders them risible and unrecognizable. Okun’s Law is still functional, and as we see from the unfortunate examples in the Eurozone, austerity doth not begat prosperity.

Thank You: For your patience, somewhere between the Crud, a few civic duties, and more Crud, the Blog’s been given short shrift. Life is now getting back to some semblance of normal and the schedule will be much more regular. I hope.

Odds: Here we go again — the old Causality Claims — this time it’s the continual lament that people on welfare (that would probably be TANF) are using drugs and the Law Abiding Righteous Taxpayers should not be paying out for those rascals who spend the welfare money on drugs. Nevada State Employee Focus notes state senator James Settlemeyer’s bill on the subject. The problem is that while it can be demonstrated that a small percentage of the low income population does indulge in contraband substances; the research also demonstrates that a small percentage of the Law Abiding Righteous Taxpayers are also engaging in the same forms of recreation. Thus, it’s really hard to make the claim that being “on welfare” allows the indigent to engage in “recreation” at a rate higher than the general population. Oh, and there’s another problem — the idea isn’t working in Florida:

“The utter absurdity of this law is magnified when you realize how much it cost the state of Florida to run this program. The data released today shows that Florida spent $118,140 reimbursing the overwhelming number of Florida TANF applicants — 3,938 to be exact — who tested negative for drugs. That is far more than any money saved by the program, at a net cost to the State of over $45,000. And that’s only part of the cost to the state to run this program. There are also the administrative costs, staff costs, and, of course, the litigation costs. Furthermore, the testing program didn’t deter individuals from applying for help — an internal document about TANF caseloads revealed that, at least from July through September, the policy did not lead to fewer cases.”

It is also hard to argue in favor of drug testing the welfare recipients as a way to curtail government spending, and then spend more government dollars implementing a program than the net benefit. If we apply the cost benefit analysis so popular in some conservative quarters — the costs in this instance outweigh the benefits. Bottom line? If one is looking for ways to improve the state’s bottom line — this isn’t it.

NSEF is also on to another element generally not pointed out by the Law Abiding Righteous — illegal drugs aren’t the most common addictions in the United States, that dubious honor goes to (1) alcohol and (2) tobacco/nicotine. And, while we’re about it — What if I asked, as a Law Abiding Righteous Taxpayer, that no law shall be enacted the vote upon which was taken while any member of the Assembled Wisdom was under the influence of a lovely Cabernet or Chenin Blanc from the cellars or stores of any public relations, government relations, or other Good Old Boy purveyor network?

Ends: For all the blather about the nomination of former Senator Hagel to be confirmed as Secretary of Defense, or of John Brennan to secure the CIA Directorship — there’s an official whose term needs to end — Ed DeMarco, currently running the FHFA.

“DeMarco says his emphasis on protecting investors in mortgage-backed securities has been mischaracterized as sympathy for corporate interests when it’s really concern for ordinary Americans.

“Mortgage-backed securities are critical elements in the investments of our retired citizens that have bond portfolios and are relying on that as a source of income,” he said. “We’re thinking, ‘This isn’t some huge hedge fund that’s at risk here. This is citizens across the country.’ ” [WaPo]

OK, let’s ask: How many retired citizens have bond portfolios? Have bond portfolios which are a significant source of their retirement income? 54% of Americans estimate that Social Security will be a major source of their retirement income. 34% believe it will be their primary source. 22% of Americans are counting on their savings accounts with their local bank as a major source of retirement income. About 9% believe that annuities and insurance will comprise a major part of retirement income. 45% are counting on Retirement Accounts like 401(k)’s. 23% are counting on Retirement Pension Plans; and 20% were counting heavily on stock portfolios and mutual funds. [Mainstreet] [See also: ICI pdf 2008] Mr. DeMarco’s concern gives every appearance of being lashed to the interests of a very small, and recently declining, number of retirees who are not relying on Social Security, Individual Retirement plans, Pension Plans, or personal savings for their retirement income. The rest of us would be better off if concern for struggling homeowners were higher on the FHFA’s priorities.

Don’t look now, but Nevada Representatives Amodei (R-NV2) and Heck (R-NV3) just voted to usurp the power of governors in our 50 states to implement ‘welfare to work’ programs designed to increase the number of persons finding employment who are now receiving public assistance. [vote 589] Voting against new programs to move more people from welfare to work doesn’t sound like a traditional GOP position — However, that’s what happens when guns are jumped and propaganda replaces position papers.

Here’s what the House Republicans passed:

HJRes 118 Providing for congressional disapproval of the rule submitted by the Office of Family Assistance of the Administration for Children and Families of the Department of HHS relating to waiver and expenditure authority under the Social Security Act with respect to the Temporary Assistance for Needy Families program…

Here’s what the Department of Health and Human Services actually said:

“HHS is encouraging states to consider new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment. Therefore, HHS is issuing this information memorandum to notify states of the Secretary’s willingness to exercise her waiver authority under section 1115 of the Social Security Act to allow states to test alternative and innovative strategies, policies, and procedures that are designed to improve employment outcomes for needy families.” (emphasis added)

Note: The states only get the waiver on the work rules IF their new policies Improve Employment Outcomes — translation — IF more people are moved form the welfare rolls to the employment rosters.

Who requested the waivers?Nevada and Utah, both with Republican Governors.

“Nevada is very interested in working with your staff to explore program waivers that have the potential to encourage more cooperative relationships among the state agencies engaged in economic stimulus through job creation, employment skill attainment and gainful employment activities. Nevada is also interested in exploring performance measures that ensure program accountability and also increase the probability of families becoming self-sufficient by providing meaningful data as to the services or combination of services with the best outcomes. [Nevada Department of Health and Human Services, 8/2/11, via The Huffington Post]” (emphasis added)

So, congratulations Representatives Amodei and Heck, you’ve both voted in favor of less program accountability, and against innovations that might increase the probability families in Nevada currently receiving public assistance could become self sufficient.

An unsolicited suggestion — next time turn off the cable TV broadcast and read the relevant statutes before voting? Just Sayin’

One of the cherished myths of conservative ideology is the comfortable welfare recipient cashing in checks which amount to “more” than a poorly paid job. This isn’t the real picture in Nevada. Or, anywhere else for that matter. Consider the following chart for a moment:

Life gets a little more complicated when eligibility or need calculations are added.

Liquid and non-liquid resources are evaluated to determine whether or not they are countable. Countable resources cannot exceed $2,000 per TANF household. When resources exceed this limit the case is ineligible.

“Types of countable resources are cash on hand, stocks, bonds, mortgages, deeds of trust, bank accounts, real property, etc. There are certain types or resource amounts which are not counted when determining eligibility such as:

One automobile.

The home, including any contiguous land, which is the usual residence of the assistance unit that the household owns or is buying.

One burial plot for each member of the household.

Burial funds up to $1,500 equity value for each household member

Household goods and personal items.”

Let’s go back to the “countable resources” for a moment. In the FAQ section the Nevada Department of Welfare describes some assets that count against eligibility or need:

“However, these are some of the items counted as assets: checking and savings accounts, Individual Retirement Accounts (IRAs), certificates of deposit, stocks and bonds. Recreational vehicles and property other than that listed above.”

Here’s the Catch 22. One vehicle, probably needed to get to work, doesn’t count against the recipients, nor do the clothes on their backs, or the furniture and appliances, or the burial funds and plots. Or the house with the roof over their heads. BUT keeping these items is another matter. While conservatives bemoan the lack of “savings” evidenced by the poorest among us, the rules of the game are rigged so that if a person does manage to put some money away for retirement, educating children, paying for medical services (like a Health Savings Account) — THEN those are countable assets which diminish the support for the family because Heaven forefend! They’d be Welfare Queens. In short, damned if they do and damned if they don’t.

Gee, if “those people” would “just save” then they wouldn’t need public assistance, but if they are eligible for public assistance and DO save they are penalized. If, of course, they don’t save then they can get the help they need to keep the family afloat for the month.

Quite recently a Republican candidate for the presidency of the United States said he wasn’t worried about the very poor because they have a “social safety net.” This would be former Governor Romney’s classic: “We have a safety net there. If it needs a repair, I’ll fix it,” Romney said. “We have food stamps, we have Medicaid, we have housing vouchers, we have programs to help the poor.” [HuffPo]

Yes, as we’ve seen we do have TANF. We have nutrition assistance programs. What used to be called food stamps is now the SNAP program. The chart for SNAP benefits looks like this:

Getting out the calculator and punching in the numbers yields an average SNAP benefit of about $4.40 per day in FY 2011. [CBPP] The latest reports compiled by the Bureau of Labor Statistics [pdf Table 723] show food prices for FY 2010, and demonstrate rather quickly that the $4.40 isn’t going too far too fast. Apples? $1.20 per pound. Oranges? $1.02 per pound, up from $0.62 in 2000. Bread? $1.39/loaf, up from $0.99 in 2000. Milk? $3.32 per gallon, up from $3.11 the year before. Meat? Bringing home the bacon isn’t what it used to be. It was $4.06 per pound in FY 2010, up from $3.57 in 2009.

Thus far we have people living in poverty, who are admonished to be thrifty savers — but find their monthly benefits reduced (or eliminated) if they do, being asked to feed family members for $4.40 per day.

“If it needs a repair, I’ll fix it,…”

After trying mightily to get Governor Romney on record supporting the Ryan Plan the Democrats watched as the Romney campaign did it for them last December. [WashMonthly]

And, what would the Ryan Budget Plan do to SNAP recipients? Slash approximately $127 billion from the program for the next ten years. [CBPP]

And more, what would the Republican Budget Plan do to TANF (Temporary Assistance to Needy Families)? This program has already stagnated, tied as it is to block grants which in turn are linked to out-of-date levels: “basic federal TANF block grant funding has eroded substantially in inflation-adjusted terms over the years available. The value of the TANF block grant has declined about 30 percent in real value since 1996. ” [CBPP] (emphasis added) In Nevada, the value of TANF benefits for a single parent with three children declined by 22.7% since 1996.

Rep. Ryan was pleased to call this state of affairs an “unprecedented success.” [MC] Here’s a picture of what he was speaking to:

Quite simply, it doesn’t do to describe the block grant TANF program as an unqualified success if it is insufficiently funded to meet the current needs of families faced with reduced circumstances, and worse still to contemplate it as the “model” for further reducing federal expenditures for SNAP.

Therefore, convinced as Governor Romney may be that the poor are secure, that ephemeral security means severely limited resources for daily living, indexed to long out of date base numbers (TANF) supposedly supplemented by SNAP funding which requires recipients to limit their expenditures for food to $4.40 per day.

Anyone with a $4.00 plastic calculator and 6th grade arithmetical skills can determine that the Romney/Ryan prescription for the social safety net is more likely to shred the net than secure it.